Slovenia: Economic activity contracts most since Q4 2009
May 31, 2013
In the first quarter, GDP contracted 4.8% over the same quarter last year, which was well below the 3.0% drop recorded in the previous three-month period. In addition, the contraction exceeded the 2.9% decline expected by market analysts and marks the steepest fall seen since Q4 2009.
The quarterly contraction mainly reflects depressed domestic demand amid a harsh set of austerity measures implemented by the government to avoid being the sixth Eurozone country to require a bailout. Private consumption fell 5.4% over the same period last year (Q4 2012: -5.8% year-on-year), while public spending declined 2.0% (Q4: -1.3% yoy). In addition, gross fixed investment fell 2.0% in Q1 (Q4: -10.6% yoy).
Meanwhile, exports of goods and services rose 1.8% in Q1, which represents an improvement over the flat reading seen in Q4. On the other hand, imports fell 1.8% (Q4: -6.6% yoy). As a result, the external sector's net contribution to overall economic growth deteriorated from 5.2 percentage points in the last quarter of 2012 to 2.8 percentage points in the first.
On a quarter-on-quarter basis, GDP fell a seasonally and working-day adjusted 0.7% in Q1, which followed the 1.0% decline recorded in Q4.
The Central Bank expects the economy to decline 1.9% in 2013 and to start a modest recovery in 2014, with GDP expanding 0.5%. FocusEconomics Consensus Forecast panellists anticipate that the economy will decline 1.5% in 2013, which is unchanged over the previous month's projection. For 2014, the panel sees the economy growing 0.4%.